The Coming Financial Crisis

Yes Indeed, Another Crash Is Coming, Says Al Lewis

I've been predicting the next financial crash ever since the last one.

It isn't easy flapping my wings like Chicken Little while the stock market races to new highs and economists drone on about a recovery, but history is on my side.

I have witnessed the 1980s savings-and-loan crisis, the 1987 stock-market crash, the 1997 Asian financial crisis, and the 1998 collapse of a hedge fund called Long-Term Capital Management that had to be bailed out before it took down the global economy.

Then came the 2000 dot-com bust. Then, the 2008 financial crisis and the muck our economy has been stuck in ever since.

Every crisis is different in detail, but the cause is always some variation of the same game: High rollers amass debt until they can't pay it off, and then they default, setting off a string of insolvencies that can be stopped only by putting taxpayers at risk.

Systemic fraud is exposed in every crash, but little is done about it. Big business, big government and big bankers are too often from the same self-dealing clan. The most culpable among them will claim no one could have possibly seen the big crash coming, even though plenty of warnings went unheeded.

Economists working for the looting class often compare the economy to the weather. They claim that unavoidable cycles cause crashes, as if the economy were a natural phenomenon, existing apart from humanity. But humans create economies, and humans cause financial disasters.

Financial crimes are tolerated in the name of free-market capitalism and the comforting pretension that another economic crash could never happen again.

Make no mistake, though. The next crash will fall like the recent landslide in Washington state, where a 1999 U.S. Army Corps of Engineers study warned of the risks of a "large catastrophic failure." And then it happened.

In the next crash, when you hear someone claiming that it wasn't foreseeable, remember a new book by award-winning financial reporter Bob Ivry: "The Seven Sins of Wall Street: Big Banks, Their Washington Lackeys, and the Next Financial Crisis."

In it, he details the many financial crimes that have occurred not before but after the 2008 financial crisis.

He writes about too-big-to-fail banks only becoming larger. He writes about private-equity firms buying up foreclosed homes, turning them into rentals and then issuing bonds on the revenue streams—schemes that sound like 2004 all over again. He writes about wrongful foreclosures and the economic squeeze on ordinary Americans.

Mr. Ivry claims this is all quite deliberate: "We called it a financial crisis, but what happened in 2008 was really a leveraged buyout of the United States."

He claims things have only gotten worse. The nation is now more in debt, and its people are now more impoverished, making America more vulnerable to the next big crash.

"Predatory greed," Mr. Ivry writes, has been "weaponized for the war fought by the rich against the poor and middle class." It has America "pointed toward the second avoidable economic cataclysm of the baby boom era."

Mr. Ivry leads off his tale with a 2010 quote from J.P. Morgan ChaseJPM-0.74% Chief Executive Jamie Dimon: "My daughter called me from school one day and said, 'Dad, what's a financial crisis?' And without trying to be funny, I said, 'It's something that happens every five to seven years.' "

That this nation not perish from this earth is a big order in terms of defeating the global powers of collectivism , and we must be very clear on what will be required. Here are the realities.1.There is not much that can be done by one person alone. We need lots of help, and it will have to be international in scope. National efforts will continue to be important, but collectivism is entrenched globally. The whole world is now our theater of conflict.2. We need a corps of dedicated men and women who are prepared to devote a major portion of their lives to this mission. Much more will be required than merely supporting a political party, or subscribing to a periodical, or writing letters to politicians. The time for armchair patriotism is over.3. We need a comprehensive training program to expose the tactics used by agents of collectivism and to show how we can ethically counter them. 4. We need the same support mechanisms that our foes have long enjoyed: coordination, strategy, training, communications. Any plan without these elements is doomed to failure.5.We need an organizational structure that cannot be subverted by our opponents. It must be designed, not as a pyramid with all control at the top, but as a hologram with each of the smallest units able to create the entire movement from the bottom up.6.We need dependable funding to support the many services needed for organizational activities.7.We need a clear statement of positive principle. It is not enough to know what we are against. We must also know what we are for.8.We need a strategy, not for petitioning leaders, but for becoming leaders within our respective countries.9.We need the long view of history, realizing that our mission may not be completed in our lifetime. What we set in motion must be larger than ourselves and it must have momentum into the future.

Al Lewis is correct and it will continue as long as citizens allow it to continue. Truth will always be defeated by tyranny unless people are willing to step forward and put their lives into the battle. The future belongs not to ideas, but topeople who act on those ideas

I had to check to see that I was reading the WSJ. Balanced reporting, I guess. More readers if they can print articles that appeal to the left. Crimes committed by those on Wall Street, causing market crashes, and no one ever sent to prison. At least I've learned how other people might think, and that the WSJ has readers hungry for left leaning viewpoints.

I’m one who believes the economy and the stock market are both at artificial levels which are inherently unsustainable in the long run. None the less, I also distrust the prophecies of short term doom and gloom made by those claiming to have successfully predicted 15 of the last 4 financial calamities!

History has shown everything in the article will come to pass with only the timing to be determined. Worse than last time as all the tricks to kick the can down the road further has been exhausted. Through extreme money printing, far more debt as well as extraordinary leverage on the debt, the next crash will hurt much more as multiple bubbles are brewing. More money printing as a fix this time will not ease the pain.

Despite living through a crash only 6 years ago, President Obama has taken no steps to avoid the next one. He ran on ridiculing Bush for his irresponsibility of relying so much on debt only to be FAR more irresponsible himself. It turned out to be just one more of his countless lies to get elected. Its severity will likely be what he is remembered for, even more than the total debacle of Obamacare.

Funny money printing by the Feds creating a bond bubble and Dow up to 16,000 and counting. Guess who's watch this all has happened. Not during the Republican watch but the community organizer who has supported QE1,2,3 and added $7T in national deficit in last 6 years. Government lies to the public that the inflation is low but they take out the food and fuel cost which probably takes 40% of average household income. Real estate bubble was created by Frank and Dodd that we all well know but Dems have to audacity to tell the public it is all Bush's fault. But not after 6 years of O's reign they could still point finger at Bush is so ludicrous and insulting the citizens of this nation. Liberals are all mouth without brain and only knows how to call names when it comes down to discussing the facts. It is very sad to see the destruction of the greatest nation on earth by the liberals,unions,illegals,gays,promiscuity in the name of freedom,affirmative action,self esteem B.S. This country is collapsing and they are only interested in pointing fingers.

Has the Holder Justice Department prosecuted anyone on Wall Street for fraud? Anyone from Fannie and Freddie? I can't think of anyone that the Obama administration has gone after for criminal wrong doing related to the crisis.

My guess is that it has never been explained to you that Barney Frank was the Chair of the "House Sub-Committee on Banking Reform" during the period immediately prior to the 2008 economic implosion. Barney used his position of authority to threaten banks with Federal interference in their legitimate overseas business dealings if they didn't provide "special loans" to his low-income, no asset (unsecured) constituents.

Or, that Barack Hussein Obama himself was also part of the effort to shake down banks by alleging "Red-Lining" (look it up) practices, simply to get the banks to commit to making more uncollateralized loans to his constituents.

This was the playbook that the democrats used to trash the economy in the first place.

I was actively warning those around me about the danger of this "loans for dead-beats" program at precisely the time that Greenspan now maintains that "no one could have seen this coming". His Obama-like excuse making for not doing his job as Fed Chair and raising interest rates to choke off the unsustainable level of interest only mortgages and other ill advised lending schemes that benefitted no one except the dead-beats - and them, only for a short period.

Now that these socialistas have trashed the economy they want to blame who ? George Bush? Climate Change ? Bad luck and "unforseeable" developments ? That is all BS....

Have you noticed that they can't get anything going in it's place except to shift their dead-beat constituents over to the Social Security Disability roles ?

I hope you're one of the young ones who voted these thieving turkeys into power, that way you'll have decades of jobless depression ahead of you as you struggle to choose between feeding yourself or paying off Obama's debt to the Chinese.

Me? I'm one of those that the democrats love to hate. I am very much gainfully employed in a STEM related field that even have the Chinese contacting me with high paying overseas opportunities. I put myself in this position by doing what the democrats despised. I worked diligently for decades within the engineering community designing and constructing chemical, oil & gas, pharmaceutical, biotech and energy facilities the world over. My projects have raised countless numbers of those born into poverty and disease, worldwide, to a level of living that they would now die to defend for their children.

My efforts brought foreign funds into my community where I paid taxes that supported the teachers, firefighters and police, not to mention government beaurocrats and local businesses.

So what I would like to hear, from one of you geniuses, is precisely how you're going to replace the vibrant, inter-connected economy we once had. So far I see nothing except the takers raping the taxpayers. If that's your plan, I'll be watching you raping and pillaging each other once you run out of other peoples money, which will be soon. But I will do it from a safe and comfortable distance.

You only get to dine on your "Golden Goose" and "Seed Corn" but once...

Keep drinking the Kool Aid, Michael. You'll be drunk and passed out before long. The Dems own Wall Street....between them they cranked up the housing bubble and stood around until it exploded in 2007-8. You have bought in to the mantra that 'GOP caters to Big Business, the Dem's are for the little guy'. Keep thinking that and you'll get your head handed to you soon.

Democrats use the highs and lows of the stock market as proof of their economic prowess when they are in office. It's true that the stock market rises significantly when a Democrat sits in the White House.

What does that really mean for America? It means the largess of the wealthy is growing exponentially. Mind you, I am in favor of people investing in the market and making a lot of money. The point is, very few Middle Class or lower Socio-Economic Americans have surplus funds to invest in the market or the time to properly maximize an investment of this nature.

Further, it means that professional investors and brokers (aka Wall Street), as Mr. Ivry and Mr. Lewis indicate, have created more and more elaborate vehicles for "leveraging" collateral.

They most definitely will not like grass-roots Republicans reigning them back in to sound financial, common sense transactions and reduced National debt. That's why there's such a vicious attack being directed at "Tea Party" conservatives by a stranglehold Democratic regime permeating all agencies in the Federal Government.

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